The Impact of Rising Euribor on Floating Rate Mortgages in the Balearic Islands

Undoubtedly, this increase translates into a new setback for people who have to review their mortgage loans with the Euribor for July. The aforementioned economist has calculated that it is “a increase of the monthly financial cost of 389 euros, which in annual terms scales to 4,668 euros of mortgage bill. This result is obtained “taking the latest data published by the National Institute of Statistics (INE) regarding mortgages on homes registered in the Islands, which establishes that the average loaned capital was 237,959 euros in May 2023. If we take as a reference a mortgage loan of this amount, for a term of 25 years and with a variable rate of Euribor + 1%, it turns out that the increase in the mortgage reference means going from paying 1,008 euros to 1,396 euros ».

The level national, the increase in the cost of mortgages is not so high. Specifically, it is 231 euros per month, that is, 2,772 euros per year. This is because, on average, the price of homes on the Peninsula is not as high as in the Balearic Islands. “The mortgage from the previous example it would cost 601 euros to 832 euros with the revision with the Euribor of July 2023, “he has summarized.

Buying a house in the Balearic Islands is more expensive

Monserrat has highlighted that «buying a house in the Balearic Islands is more expensive, financially speaking ». In this sense, he has stated that “the average mortgage in the Balearic Archipelago, compared to the Spanish one, means paying 158 euros more per month due to the increase in interest, 1,896 euros more per year.” In his view, these are “dark times for those indebted at a variable rate and for all families who are considering applying for mortgage financing at this time, in short.”